50 years ago people thought that we would be commuting in flying cars. Instead, this is what the future looks like. Welcome to the Kittypocolypse.
Our fuzzy friend here is called a CryptoKittie. CryptoKitties is the first Decentralized App (DApp) with widespread use. It is a collectible game built on the Ethereum blockchain. Users buy, sell and breed these collectible digital cats. Each kitten has unique genetic attributes that can be passed on to its offspring. Seem harmless?
Not so much.
Over the past week, CryptoKittie have been purchased for over $90,000. If you are thinking that this is simple novelty game fueled to unfathomable heights by the unrelenting frenzy for anything and everything Bitcoin/blockchain, well, you'd be right. But there are some important takeaways from this CryptoKitten craze.
Digital Asset Ownership and Production - Blockchains can secure digital assets and validate their rightful owner. It's what makes the technology so compelling. This is especially useful for assets that are unique and collectible and CryptoKittens are the first example of one such asset. What I find even more interesting about CryptoKitties is the breeding aspect. Juvenile jokes and moral quandaries about the breeding of cartoon cats aside, this is a digital asset that can be used to produce additional digital assets. That fact opens up a fascinating world of possibilities. Might we one day see "factory coins" that are used solely to produce other digital assets? Or maybe "franchise coins" where each coin represents a unit of a greater network and can produce sub-coins for a select few?
Gaming on the Blockchain - The use of markets in games is nothing new. Massively Multiplayer Online games like World of Warcraft or Eve Online have incredibly sophisticated economies. Incorporating the blockchain into gaming marketplaces would open up a whole new world of depth. Blockchains could serve as a link between the economies of the real and digital world while enabling new features like scarcity, absolute ownership, and frictionless trade. We might even begin to see people transition to working and earning their livelihood in game. I know that may sound a bit far-fetched, but this is a new frontier where pictures of cartoon cats are selling for more than cars. Welcome to the wild west.
Scalability Concerns - One of the greatest challenges to widespread adoption of DApps is the scalability of blockchains like Ethereum. While creative solutions like sharding continue to be developed, we are still nowhere near the level of scale that would be required to sustain a truly viral decentralized application. CryptoKitties has been causing incredible strain on the Ethereum blockchain since its launch. ICO's have been delayed, as the CryptoKitties surged from 4% to 14% of the traffic on the Ethereum blockchain in just a few short days. If these are the issues that are caused by a novelty collectible app, the infrastructure is clearly not ready for more widespread use and adoption. I have tried multiple times to purchase a CryptoKittie and begin my journey towards bone-fide Digital Cat King, but unfortunately the network congestion has thwarted me at every attempt. If scaling issues aren't solved, DApps will never have the sort of seamless and agile user experience that we have grown accustomed to in the digital age.
Decentralized applications built on the blockchain face significant challenges on their path to widespread adoption. Scale is, and will continue to be, a massive problem as more and more people become interested in taking advantage of the benefits that blockchain technology offers. However, the success of CryptoKitties is undeniable. If this is the potential of a simple collectible game built on the blockchain, imagine the possibilities for other applications.
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